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SBI to Improve MSME Lending Structure to become top choice for MSMEs

By : Profectus Magazine   /   26 Dec 2021  /   News and Updates /  

“With the objective of becoming banker of choice for MSMEs, SBI intends to improve existing processes and structure in the SME space for achieving improvement in market share/enhance the portfolio while ensuring the asset quality,” SBI said.

State Bank of India (SBI) is planning to improve their entire operational setup for lending to micro, small and medium enterprises (MSMEs) in view to improve customer experience while keeping bad loans in check.  The bank has issue a Request for Proposal (RFP) seeking bids from consultants to carry out the process.

In the tender document dated March 26, the bank said that it would like to increase its market share in this category, which currently stands at 15%. “With the objective of becoming banker of choice for MSMEs, SBI intends to improve existing processes and structure in the SME space for achieving improvement in market share/enhance the portfolio while ensuring the asset quality,” SBI said.

SBI has find certain gaps in the current operational flows such as Credit Guarantee fund trust for Micro and Small Enterprises (CGTMSE) is completely taken care manually as there isn’t any interface with fund’s portal. The bank says there has been poor handling in this segment and there is a need to identify those gaps to on-boarding MSMEs to avoid high Non-Performing Assets (NPAs)

There are Four Verticals in SBI’s MSME Lending Operations 1. SME Centre and Relationship Managers, Supply Chain Finance, Credit Guarantee fund trust for Micro and Small Enterprises (CGTMSE) and Cluster Financing .


SBI has a strong team of 1,770 Relationship Managers to provide specialized services to MSMEs as per their requirements. It has a network of more than 1,100 specialized SME
Intensive and MSME branches.


SBI’s SME Portfolio grew 5.6% year on year to (2.94 lakh crore) at the end of December 2020. The NPA ratio stands at 6.85% in the SME segment amid an interim judicial order to not recognize NPAs after August 31, 2020 (The order has since been lifted)

Tags

MSME, SBI, Udaan, MSME Loans, Lending, Home

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